Money Matters for the Unmarried

Be sure you make the right legal, financial decisions to protect your assets

En español| Are you living with someone but aren't married for one reason or another?

Even though you haven't tied the knot, you and your significant other have made a commitment to each other by deciding to live together. Taking steps to protect your individual and shared assets should be a top priority. Doing this can help preserve the long-term financial and emotional health of your relationship.

More on Estate Planning

These living arrangements are increasingly common for those of you who are 50 and older — especially when you or your partner have been through a divorce or want to avoid jeopardizing financial or medical benefits.

The decision to combine or not combine finances is a tricky one and shouldn't be taken lightly.

Here are four things you need to know to protect yourself, your partner and your assets when you buy a home, open joint accounts or make other financial moves with a live-in love.

The most important thing for unmarried people to know is that there is no financial or legal protection for them under federal law. The burden is on you to take specific action — such as proper estate planning — to handle your financial affairs. The first step in protecting all parties involved is to create what some financial experts call a "Living Together Agreement."

This document identifies "the current status of the relationship, and identifies what will happen should either of you become disabled or die, or should the relationship unravel," says Debra Morrison, a certified financial planner.

The best time to draw up this agreement is at the beginning of the relationship, while love is still in the air. Each of you should get separate legal counsel. As part of the agreement, or as an attachment to it, include a Statement of Asset Ownership in which you describe what you each own separately or jointly.